...A declining spenglerian carnival of Colossaalism united with Inflation where the numbers one through 10 are forever banished as worthless arithmetical detritus from a bygone age... - Beardrech

Naturally we believe the govt numbers... and Boobus Americanus sleepwalks off the edge of the energy-crisis cliff clutching his shares of "Crisco", Yoohoo and GooGah munching on his Yum Yums and Ho Hos. Future historians will have a hell of a time figuring out what the hell Americanus neanderthalus was thinking and exactly what brought on his sudden demise... - Henny Penny

Actually, it reminds me more of the June July period in 2001, when the market made a two three months massive top and my indicators refused to turn bullish, I sticked with them and while I had to change late in July the double bottom model (August/October) to the coalescence model (Sep16/2001), the turnips were right in staying their course. We have a very similar setup right here, it may mean that instead of three legs down, we may have just two but I see nothing that points to 1260 having been a bottom. Not by a long shot. We have been around here for more than a week and the new highs rae not expanding (they are almost at the same puny level they were at 1260) the volume is contracting, the P/C ratio is close to .5 and the list goes on. I say we are at an extremely dangerous level here and reiterate the "run to the hills" call from January 6.

"California's latest recession has proved to be far deeper than previously estimated, the government said Friday, with job losses at the depths of the downturn reaching 290,000 -- nearly triple what state officials had reported."

GF - the initials 'N.R.' stand for Ned Riley - he's her pimp, you see. Ned tells me that Maria is deeply disturbed about her younger, brainier rival Rebecca Quick ... who's plotting her ascent from a seedy tenement to media superstardom on the Matrix payroll. Get an eyeful of Rebecca before she was 'discovered':

"The board, in an effort to balance the Vallejo City Unified School District's $5.9 million deficit budget, is considering cutting all high school bus transportation, which is on a list of 25 potential cuts. If approved, it would eliminate the positions of 10 of the district's 52 bus drivers."

I am speaking both from a position of frustration and the sinking feeling that they are going to do whatever, and I do mean whatever, is necessary to keep the financial markets inflated. I am starting to think that much of this is political in that the word has been put on that recession will not be tolerated. There is a definite arrogance about it all. Like Washington, Wall Street and the FED can simply strong arm the economy while keeping the public confused, hoping, and distracted.

The pension situation is one of the main reasons the Fed PPT, and the companies themselves will try to fight off any major decline in the market. The lower the market goes the bigger their pension shortfalls get. I don't know this for sure but I suspect there are still many companies issuing debt so that they can continue to support their stock (GE). IBM stated they were issuing new stock into their pension and then they announced they are buying back stock. It looks like they have concluded that manipulating their stock price is essential to prevent the pension shortfalls from becoming a black hole.

I was pondering in previous days how the market would retest the October lows. It never occurred to me that the reversal on Feb 13th could be a significant bottom. I still don't think it is, but I may finally put stops on my positions and just let the market decide. I remember the reaming I took last March.

Actually, if you look CLOSELY she's holding one and the ASShtray  contains another that is lit. It, no doubt, belongs to Mr TwoScrewsLoose. LOLOL

"The sphinx set riddles for people which they could not solve and the sphinx devoured them." Russian poet Ilia Ehrenberg reflecting years later upon the debacle of the Bolshevik Revolution and civil war

"In any case, experience shows people are unlikely to change their ways without a cataclysm of existential proportions" Meinhard Meigel, German economist and demography expert on his prophecy of a Wagnerian abyss of social and economic chaos

"We believe that here is no easy way out of this mess, and that the chance of a benign outcome, while hopefully possible, is quite low." Comstock Partners 3-17-2005

"Not without a shudder may the human hand reach into the mysterious urn of destiny." Junk email promoting the sale of Valium, Viagra, Soma and Cialis. Of course, we AMERICANS need not WORRY about such CLAPTRAP!!!

"The trouble about myths, or lies, is that those who foster them are stuck with them." Edward Crankshaw

"I don't buy the idea that a crash will come without warning. There are always warnings. All crashes have certain common technical preconditions." Doc (snorjt)

"YOU look IMPORTANT. Are you important, or just....WEIRD?""Bob I am" at a political gathering, to HRFF, 9-29-04

"Are YOU C.I.A.???""No, I'm not "CIA".""Well, you sure LOOK LIKE you're C.I.A.!!!" Lead singer of the rock band KISS to HRFF at a luggage carousel at SeaTac airport circa 1996

"Unlike you, I use words people can understand." Doc

"America at the moment, with its faith-based currency, faith-based economy and faith-based government, might be a heaven for those who love faith, but it's a hell for those of us that respect evidence." The Daily (W?)Reckoning, circa 9-17-04

"What should be clear at this point is that even huge fiscal stimulus and unprecedented financial excess are incapable of fostering a sound and self-sustaining economic expansion. The paramount issue, today and going forward, is the deeply maladjusted U.S. economy and its increasing unresponsiveness to even enormous yet misdirected financial stimulus. Both the Financial Sphere and Economic Sphere are severely maladjusted." Doug Noland's Credit Bubble Bulletin, Aug 24 '04

"U.S. dollar purchasing power relies almost entirely on the difference between interest rates in Japan and the higher rates in the United States." Warren Pollock, Prudent Bear essay circa 9-04

"What about your replacements? the Children. What do we tell them when the whole thing caves in?" HyperTiger

One of us members of the concerned stoolizenry should write to Maria forthwith and warn her of the bleak fuk-u-ture for which she's bound if she doesn't move her ASSets into physical precious metals and a commode-titty fund or two. I believe that the visions artfully sketched by N.R. DeMexico and Jane Manning are prophetic, if not clairvoyant. Lettuce tarry not- Maria's life may hang in the balance!

...A declining spenglerian carnival of Colossaalism united with Inflation where the numbers one through 10 are forever banished as worthless arithmetical detritus from a bygone age... - Beardrech

Naturally we believe the govt numbers... and Boobus Americanus sleepwalks off the edge of the energy-crisis cliff clutching his shares of "Crisco", Yoohoo and GooGah munching on his Yum Yums and Ho Hos. Future historians will have a hell of a time figuring out what the hell Americanus neanderthalus was thinking and exactly what brought on his sudden demise... - Henny Penny

Jorma, while I agree with many of the points you made I have to disagree when you say "I've known in my gut it's going to be hard making big returns being a bear." I think many in here do quite well being bears, considering it's a BEAR market. I'm talking intermediate term traders not the quick and nimble like B4 who play both sides. You also say "Now the nasty is down 75% and the big indexes down 50%. Sure I think they are going down more." So what are you saying exactly? Even though you think the market will go down there will be no big returns going short?

Signed "Confused"

I agree Aussie. I had my wake-up call while trying to make money in this bear market. I looked back at the indices over the period I was trying to make money "short" and saw that they were down substantially and I was going nowhere fast. Something was wrong and it wasn't Mr Marke it was me and my trading strategy. I fixed the problem quickly.

Now I play the intermediate term only, position in at low risk times like last Dec/Jan and then forget about it. Right now the worst thing I could do is think too much or think at all, I just let the stops do the thinking and trading for me once in.

I no longer look for the quick kill or home run, I go for modest returns that are more likely to occur. The returns in fact are really not modest. Steady but sure.

80% of the stocks out there are worthless trash and have more of a propensity to trend lower than rise, especially in a raging bear market like this. If you are not capitalizing on this fact then you are doing something wrong.

This bear is a gift. Let these short-term gamers eat themselves and each other up alive.

Thank you, Jorma, for this most revealing diss?course. In the twinkling of an eye you have consigned the burgeoning arena of "socially responsible" 'investing' to the dustbin of history - SNOT to mention divulging, albeit with considerable candor, your personal "moral" touchstones in the mostly? amoral shark-flled arenas of trading in the financial markets.

The BARE clings, forlornly, perhaps, to the quaint? notion that "pragmatism" in such precincts is one thing; UDDER ruthlessness yet another kettle of fish. Butt, HRFF WAS/IS speaking of sharks - of the terrestrial ilk, that is. There is no honor amongst thieves they say, and evidence is mounting that the financial markets have an unhealthy population of 'em in their rank and file.

Of course we know the agenda of the PPT!!! The issue is whether your ASSessment is right. The corollary to that is whether the PPT or any international cabal of PPT's hASS the ability to staunch the bleeding the way it INTENDS in the short/near term. They appear to, but they've been throwing more and more fuel into the furnace and the temperature has not increased to their liking.

There aren't many here who would, probably, argue the ultimate resolution of the current trend. At least those who haven't been chASStened, that iz. The PPT has brazenly said it will do whatever it takes (Bernake). Realizing this means devaluation of our currency, he hASS, probably, as the boyz at THE DAILY (W?)RECKONING have noted, already triggered an exodus of FUReign capital.

Will it take your 10 sigma or whatever event? Or something less, some heretoFUR unnoticed cog in the wheel coming unstuck or snapping that, at FURst, doesn't seem like cause FUR alarm, a la the 1998 crisis?

Could this listless, desultory action endure for months or even years?

Certainly!

Is it likely? Probably SNOT. The best laid plans o' mice 'n men gang aft a'gley. If you don't think so, just look at the troubles the cabal in the White House is encountering with their GRAND DESIGN, already, internationally.

Something is probably going to go HAYWIRE, IOW. It doesn't have to be a 10 sigma or whatever. It can slowly unravel and have the same effect. Stocks are still ridiculously overvalued, endless exhortations to the contrary SNOTwithstanding. Big profits to the downside are still quite possible. In fact they are likely...for the patient and well capitalized.

"The sphinx set riddles for people which they could not solve and the sphinx devoured them." Russian poet Ilia Ehrenberg reflecting years later upon the debacle of the Bolshevik Revolution and civil war

"In any case, experience shows people are unlikely to change their ways without a cataclysm of existential proportions" Meinhard Meigel, German economist and demography expert on his prophecy of a Wagnerian abyss of social and economic chaos

"We believe that here is no easy way out of this mess, and that the chance of a benign outcome, while hopefully possible, is quite low." Comstock Partners 3-17-2005

"Not without a shudder may the human hand reach into the mysterious urn of destiny." Junk email promoting the sale of Valium, Viagra, Soma and Cialis. Of course, we AMERICANS need not WORRY about such CLAPTRAP!!!

"The trouble about myths, or lies, is that those who foster them are stuck with them." Edward Crankshaw

"I don't buy the idea that a crash will come without warning. There are always warnings. All crashes have certain common technical preconditions." Doc (snorjt)

"YOU look IMPORTANT. Are you important, or just....WEIRD?""Bob I am" at a political gathering, to HRFF, 9-29-04

"Are YOU C.I.A.???""No, I'm not "CIA".""Well, you sure LOOK LIKE you're C.I.A.!!!" Lead singer of the rock band KISS to HRFF at a luggage carousel at SeaTac airport circa 1996

"Unlike you, I use words people can understand." Doc

"America at the moment, with its faith-based currency, faith-based economy and faith-based government, might be a heaven for those who love faith, but it's a hell for those of us that respect evidence." The Daily (W?)Reckoning, circa 9-17-04

"What should be clear at this point is that even huge fiscal stimulus and unprecedented financial excess are incapable of fostering a sound and self-sustaining economic expansion. The paramount issue, today and going forward, is the deeply maladjusted U.S. economy and its increasing unresponsiveness to even enormous yet misdirected financial stimulus. Both the Financial Sphere and Economic Sphere are severely maladjusted." Doug Noland's Credit Bubble Bulletin, Aug 24 '04

"U.S. dollar purchasing power relies almost entirely on the difference between interest rates in Japan and the higher rates in the United States." Warren Pollock, Prudent Bear essay circa 9-04

"What about your replacements? the Children. What do we tell them when the whole thing caves in?" HyperTiger

Can you please remove the accolade towards me on your repost of the Swup. Machinehead deserves all the praise.

Tanks for posting it.

TE

NONE of what I type, should be taken as financial advice.

And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.

They can only push only so many stocks and their bursts of pressure can only do so over a very limited period of time. The market is going to do what the market is going to do. Their effect in reality is extremely brief and spurious. Learn how to live with it b/c it cannot be avoided. You're wasting your time in trying to avoid it and playing it long is ridiculous too b/c you're going against the secular trend (odds).

The solution is simple:

Do not short the index "Fatal Attraction" glam stocks - period.Do not short stocks making new highs or in strong uptrends - period.

(Example: EBAY, SBUX, COCO)

Short a well-diversified portfolio of exact OPPOSITE type stocks. Intervention will barely effect you. Such stocks once beaten down have slim to no chance of ever recovering as long as the bear rages on, which will be many years.

This is the ratchet down approach - a.k.a getting the market and its Pigmen by the balls.

One thing we know for SURE, their attempts to prop Mr Marke WILL FAIL in the long run. Then play the long run - duh!

Without benefit of TA, I think the 10 sigma event which breaks this market will be the turn in interest rates and credit inflation. If 12 interest rate cuts can't revive this economy (and , by proxy, the sm), imagine what the first increase will do to both. IMHO

Bob Carver over at marketclues says the Fed has quietly been buying the long bonds for over a week in order to keep interest rates down-have a read yourself he makes a good case. I agree with him don't look for rates to go up anytime soon. I noticed in the last hour yesterday a lot of hedge funds buying large and I mean large blocks of puts in the SPOO'S and QQQ tying that in with a favorite indicator of mine that is calling for a gap down in the futures tomorrow night suggests to me that Monday is D day so watch the futures tomorrow when they open-War you think?? could be! Trade Safe!

The slide of interest is 16. The graph on the left show the decay in the S&P 500 sign of price changes memory or conversely the ability to predict future prices. It's a log plot so the decay is exponential: price change correlation is proportional to exp(-t/Tau) where t is time and Tau = 4.0 min. Tau is thus a quantitative measure of the S&P's memory.

After about 2.8 minutes, the autocorrelation of the sign of price change is down to 0.5 or 50%. At this point, the predictive ability of any (cycle-based, etc.) model is as good as a coin toss.

On the other hand, the graph on the right shows the correlation in the magnitude of price changes and these can persists from minutes to years.

In other words, "buy cheap and hold" or "short dear and hold" may be profitable.